PNB net income up 12% to P15.1 billion in 9M 2024

28 October 2024 — The Philippine National Bank (PSE: PNB) posted a consolidated net income of P15.1 billion for the first nine months of 2024, 12 percent higher compared to its earnings for the same period last year at the back of robust growth in net interest income.

Comprising 83 percent of total operating income, the Bank’s net interest income increased by 10 percent year-on-year to P36.5 billion, sustained by the 15 percent growth in interest income arising from the expansion in loans to customers as well as investments and other liquid placements, combined with improvement in the yields. On the other hand, the higher interest expense on deposits was contained by deploying these deposits to fund assets with better yields.

“The Bank’s core revenues steadily increased as we continue to enhance our policies and processes to sustain the growth momentum of the Bank’s core banking activities amidst continued economic expansion,” said Francis Albalate, Chief Financial Officer of PNB.

Meanwhile, the Bank’s other operating income reached P4.1 billion for the period ended September 30, 2024, lower than the year-ago level that included gains from the sale of foreclosed assets amounting to P3.7 billion. Excluding these non-recurring gains on the sale of foreclosed assets, the increase in other operating income remains high at 31 percent year-on-year, boosted by superior trading income anchored on strategic positioning and timely churning of books.

Operating expenses slightly increased by one percent to settle at P21.7 billion as solid revenue growth translated to higher business taxes and other business-related expenses.

The Bank set aside additional credit provisions of P3.7 billion during the period, albeit lower than year-ago level as the Bank’s asset quality kept on improving.

As of September 30, 2024, the Bank’s total consolidated assets stood at P1.20 trillion, two percent higher than a year-ago level, and is attributed to the increase in loans and treasury assets. The Bank’s reported income for the period raised its total equity by 13 percent year-on-year to reach P210.1 billion. The Parent Bank’s Capital Adequacy Ratio stands at 17.8 percent and Common Equity Tier 1 Ratio is at 16.9 percent which are way above the minimum regulatory requirements.

Recently, PNB has successfully tapped into the international market with a US$300 million five-year sustainability bond offering under its US$2 billion Euro Medium Term Note program. Moody’s has assigned an investment grade rating of Baa3 to the said bond which was priced at T+102 basis points, with a fixed coupon rate of 4.85%. This bond offering in October resulted in strong demand as the final order book was more than 3.6x oversubscribed, reaching US$1.1 billion from global investors.

“We are grateful for the support shown by global investors in our return to the international bond market after a five-year hiatus,” said Florido Casuela, President of PNB. “The result of this note offering is a clear indication of investors’ trust and confidence in PNB. This offering will fund the Bank’s sustainable financing initiatives as we continue to solidify our position among the forerunners of nationwide development across the Philippine banking system.”

PNB was named as the Most Admired Financial Services Provider in the Philippines in August 2024 by the International Business Magazine Awards (IBMA). The IBMA gives the most coveted awards to the most outstanding nominations across various industries with a pool of subject matter experts and strong research analyst wing who carefully inspect, verify, and scrutinize all nominations. This is the second time the IBMA has recognized PNB. In 2023, the Bank was declared by IBMA as Best Bank for Corporate Social Responsibility.

For the third straight year, PNB was recently awarded with the prestigious Four Golden Arrows by the Institute of Corporate Directors (ICD) at the 2024 ASEAN Corporate Governance Scorecard Golden Arrow Awards Night. The Award recognized the Bank’s consistency and commitment to uphold good corporate governance in its business practices. The Award also affirmed the Bank’s commitment in living its corporate values of trust and integrity while sustaining profitability and delivering service excellence.